2026 (1) TMI 1110

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....IT.DR ORDER PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the PCIT (Central), Surat, (in short 'PCIT'), dated 31.03.2025 for the Assessment Year 2021-22 in the proceeding under Section 263 of the Income Tax Act, 1961 (in short 'the Act'). 2. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2021-22 ....

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....s per TCS data and the turnover as disclosed by the assessee in its account, suggesting an underreporting of turnover for the year under consideration. Since, the AO did not examine this discrepancy in the turnover in the course of assessment, the Ld. PCIT held that the order of the AO was erroneous and prejudicial to the interest of the revenue. Accordingly, he set aside the order of the AO passe....

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....es. He submitted that a clarification in this regard was duly furnished before the Ld. PCIT in the course of proceeding u/s.263 of the Act. Under the circumstances, the Ld. PCIT was not correct in setting aside the assessment order to the AO for fresh verification of the matter. 5. Per contra, Shri Mukesh Jain, Ld. CIT. DR submitted that the difference in turnover as per TCS data and as disclos....

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....er of assessee was apparent from the tax audit report vis-à-vis the P&L account. In the course of assessment, no query was made by the AO in respect of this discrepancy in the turnover. As per Explanation-2 to Section 263 of the Act, the order of the AO is deemed to be erroneous and prejudicial to the interest of revenue if the order is passed without making inquiries or verification, which....